The displacement of direct foreign investment beyond the energy trap urged

Pakistan, Industrial and Union Front Traders (PIAF) warned that Pakistan excessive dependence on foreign -focused foreign investment prevents broader economic growth, calling on policy -makers to extend investment opportunities and investment opportunities.

Piaf chief Mian Sohail Nisar said the heavy concentration of foreign capital in a single sector is concerned. “Foreign investors continue to channel funds mainly into energy, but Pakistan has much greater potential in mining, information technology and value added production,” he said.

In the last 10 years, the FDIs in Pakistan ranged from $ 2 billion to $ 3 billion a year, with about 35% heading to the energy sector, stressing the need for differentiation.

According to Pakistani State Bank (SBP), Pakistan attracted total foreign foreign investment (FDI) of $ 2.46 billion in 2024-25, rising about 5%. China remained the top investor with $ 1.23 billion, almost doubled its investment since last year, recording a 91%jump.

Other major contributions came from Hong Kong with $ 470 million, the United Arab Emirates with $ 283 million, Switzerland with $ 203 million and the United Kingdom with $ 202 million.

Sector, the electricity sector continued to dominate input, receiving $ 1.17 billion, much of Hydel’s projects, while financial services attracted $ 702.2 million. Oil and gas exploration, electronic, computer science, food, oil refining and textiles were among other areas that managed to ensure a lower share of investment.

Representatives of the business community noted that while the total numbers for FY25 show improvement, profits remain fragile and intensely oblique. They emphasized that reliable projects, transparent regulations and genuine financial opportunities are necessary to transform investor interest into wider inflows. Without reforms, they warned, Pakistan is in danger of staying stuck in a narrow energy model.

An industrialist based in Lahore, Ashraf Javed, pointed out that the countries of the region are moving quickly. “India and Bangladesh are attracting billions to differentiated areas such as this, construction and e -commerce, and we continue to depend on electricity projects,” he said. “We need stable policies, simplified regulations and fixed tax frameworks if we are to bring long -term investors to other industries.”

Mining has emerged as one of the most promising areas for Pakistan, as the important reserves of copper, gold, carbon and mineral rare earths in provinces such as Balochistan and Khyber-Pakhtunkhwa. Several foreign companies, including those of the United States, have shown interest in this area. However, business leaders argue that without practical steps such as modernization of mining laws, securing investor security and reducing bureaucracy, interest will not be translated into commitments.

Independent economists also expressed similar concerns. Syed Afaraz Ahmad, an analyst, noted that Pakistan’s dependence on debt development makes the differentiated FDO more important than ever. “Energy -related investments can keep the lights, but they do not produce high employment or strong export profits. Mining, technology and construction are the areas that can change the economic perspectives,” he said.

The business community stressed that Pakistan’s geographical location at the crossroads of South and Central Asia gives him a natural advantage to become a regional investment hub. However, they warned that without the liberation, predictability in politics and efforts to improve business convenience, foreign capital will continue to bypass the country.

“The potential is there, however, the challenge is whether Pakistan can create the conditions that persuade investors to overcome energy and bring true value to the economy,” Javed said.